Bankruptcy Protects You From Debt Related Claims
If you have already filed your bankruptcy proceedings and someone filed a claim against you, there are a few specifics to consider.
The first is what’s referred to as a Stay of Proceedings.
Immediately after you file either a bankruptcy or a consumer proposal, this is effective.
It means that when legal notices are sent to any party which may have a legal claim against you.
It encompasses unsecured debts, meaning that it can halt a creditor from beginning, continuing, or further pursuing any legal action they may seek against your interest.
This is provided the debts referenced are unsecured.
Ensure you inform your Licensed Insolvency Trustee of any and all debts so they can address your file thoroughly.
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Legal Actions After Filing
If you do receive notice regarding any legal action relating to unsecured creditors subsequent to filing, inform your Trustee promptly.
Let them know so they are able to supply the Stay of Proceedings to the creditor and halt any actions.
The stay is also issued to the bankruptcy court dealing with the matter.
This means that any existing legal actions such as garnished wages halt upon its receipt.
Bear in mind that filing for consumer proposals or bankruptcy is only applicable to unsecured debt.
Any secured loans are eligible for action..
Defaulting on Agreements
In the event of your failure to make payments pursuant to the terms of your proposal, you end up in default.
If this is the case, then you are subject to the revocation of your stay of proceedings.
When this happens, your creditors become once again eligible to pursue collection action.
Additionally, a creditor does have the right to apply to the court to lift the stay of proceedings.
In extreme situations only, the stay could be removed to enable a creditor to receive a court judgement pursuant to an undecided matter.
However, once it is decided, the stay goes back into effect.
Naturally, the process of bankruptcy and consumer proposals is deeply nuanced.
To gain a thorough understanding of what is required of you, reach out to your Licensed Insolvency Trustee for advice and guidance.
They can offer you individualized advice to help you rid yourself of debt sooner.
Under their purview, you can remain safe from creditor action and regain your financial footing.
Meetings are confidential and come with no obligation; so, to restore your financial health, contact an advisor today.
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